The Planning Paradox

Part of what makes financial planning so hard, is that most people have the wrong idea of what the purpose of planning is, the other part involves money.

The problem with planning is that inevitably there will be surprises, meaning the best plans are not the ones that tried to think of everything but the most resilient plans. It’s tempting to think you can plan for every contingency, but trying to do so is impossible, effortful, stressful, and makes you ironically more susceptible to being derailed by a surprise.

There’s no getting around the fact that people don’t like uncertainty, but eliminating it is impossible in practice. A plan for what you expect will happen depends on reality meeting your expectations, but life is full of surprises. A plan can’t control what happens, what it can do is provide a framework from when cooler heads prevailed to review when something happens that was unexpected. This isn’t a matter of if, but when.

Since it’s not actually possible to have contingencies for everything ahead of time the actual purpose of a plan is nimble resilience.

The more your plan leans on expectations about the future the more fragile it is. Good plans, in theory, fail in practice all the time. This happens all the time!

Time and time again, people have tried to plan for everything, which is impossible, when you would have been better off planning for anything.

It would be nice if you could plan for everything, but the problem with planning that way is it will always leave blind spots unprotected. Trying to plan for everything gives you this false sense of security while keeping those blind spots wide open, instead of trying to plan for everything you must plan for anything.

“The most important part of every plan is planning on your plan not going according to plan.[i]”

Things can and do happen that you never thought of, that you never planned for, no matter how much planning you do. The point of a plan isn’t to try to pretend you can eliminate uncertainty, its to have a way to navigate reality.

_{Photo by Robert Ruggiero on Unsplash}